On Tuesday, the International Monetary Fund (IMF) reduced the global growth forecast for 2022 to 3.6 percent.
The International Monetary Fund (IMF) announced on Tuesday that due to the Russia-Ukraine military conflict, the global growth forecast for 2022 had been reduced to 3.6 percent, down by 0.8 percentage points from the January projection.
According to the World Economic Outlook (WEO) report, as the ongoing crisis in Ukraine remains, the global economy is "on a mending path" but has not recovered from the ravage of the COVID-19 Pandemic. The report also said that since the forecast was made in January, the global economic prospects have worsened "significantly." The statement issued by the IMF indicated a severe double-digit drop in GDP for Ukraine and a significant contraction in Russia's possibilities and spillovers through commodity markets, trade, and financial channels.
The report dropped that this year's growth outlook for the European Union has been revised downward by 1.1 percentage points to 2.8 percent because of the crisis, contributing to the overall downward revision. In the U.S., the economy is expected to grow 3.7 percent in 2022, 0.3 percent below January's foreseen. Moreover, the Chinese economy has a forecast for growth of 4.4 percent this year.
On Monday, China's National Bureau of Statistics said that the country's gross domestic product grew 4.8 percent each year to 4.24 trillion U.S. dollars during the first three months, representing a steady start in 2022 in the light of the current global challenges and a resurgence of COVID-19 cases.
Experts analysts foresee that the full-year growth target of 5.5 percent set by China's policymakers is still possible but needs hard work given increasing economic headwinds.
The report foresees a decrease from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. It explained that the near-term global outlook would be defined by the Russia-Ukraine conflict, monetary tightening and financial market volatility, and the pandemic.